Did you become eligible for Medicare Part A on or after March 1, 2013? Did you keep your Affordable Care Act (ACA) health coverage instead of enrolling in Medicare Part B and then discover there were penalties for keeping that coverage?

You have until September 30, 2018 under a special program which lets Medicare Part A beneficiaries sign up for Medicare Part B without late enrollment penalties.

Who is eligible?

Medicare beneficiaries who were covered by a qualified health insurance plan and who are not enrolled in Medicare Part B are eligible. Perhaps you turned down Medicare Part B coverage or dropped it because you thought ACA qualified health coverage was more affordable. If so, what you did not realize is that you would lose the benefits of ACA coverage because of your Medicare eligibility. And, you will face Part B higher coverage costs for life.

What does the special relief provide

It provides a special enrollment period that allows individuals to enroll in Medicare Part B without facing lifelong enrollment penalties. This ends September 30, 2018

If individuals have Part B coverage now but are paying late enrollment penalties, special relief would end the penalties.

Apply for special equitable relief to enroll in Medicare Part B and/or to eliminate your Part B enrollment penalties.

Call the Social Security Administration (SSA) at 800-772-1213 or go to www.ssa.gov to find a local Social Security office that you can visit in person

Once at the office or on the phone with a representative, request special “equitable relief” to enroll in Part B and/or eliminate your Part B penalties.

At a recent Women’s Institute for a Secure Retirement (WISER) roundtable addressing strategies, choices and decisions for women’s retirement income, important new data was presented that highlights the challenges faced by women in preserving their 401(k) savings when changing jobs – particularly for women with balances less than $5,000.

Compiled by Retirement Clearinghouse (RCH) and presented to the WISER roundtable by RCH EVP Tom Johnson, the data indicates that women with small 401(k) balances cash out much more frequently than their male counterparts. However, as women’s 401(k) balances grow, they become more likely than men to preserve their retirement savings.

These behaviors, along with the results of the Auto Portability Simulation, suggest that a program of retirement savings portability could incubate women’s small 401(k) balances, allowing them to more effectively grow their savings to higher balance levels, where more virtuous behaviors prevail.

An infographic summarizing the statistics is available for download at this link.

Based on Vanguard research, women collectively represent about 40% of all defined contribution plan participants.

Each year, an estimated 5.9 million women participants will change jobs.

Of these 5.9 million women job-changers, approximately 2.4 million, or 41% will cash out $28 billion in retirement savings, paying taxes and penalties.

2.1 million, or 36% will have balances less than $5,000. Of these, 1.5 million – a whopping 71% — will cash out $2.6 billion in savings.

Over a generation, 104 million women will cash out almost $800 billion in retirement savings, in today’s dollars.

Drawing upon a 2015 survey by Boston Research Technologies, the RCH data also revealed that, at sub-$5,000 levels, women of all ages tended to cash out at much higher-levels than their male counterparts, as indicated in the graph below.

A more promising data point was revealed in a 2011 study by Aon Hewitt, indicating that women – at higher balance levels – were more likely than their male counterparts to preserve their retirement savings from job-to-job. This finding seems to mirror other research (ex. – The $10,000 Hurdle, Northern Trust, 2017) suggesting that efforts to move participants’ balances to higher thresholds can act as an effective deterrent to cash outs.

Incorporating the results of the Auto Portability Simulation, the RCH figures show that, on an annual basis, auto portability would preserve the savings of 1 million women participants. Over a generation, 42 million women would preserve their retirement savings, worth about $365 billion in today’s dollars.

While the systemic results of auto portability are impressive, its effect at an individual level is equally impactful.

The RCH analysis depicts the individual impact of preserving 1-3 $5,000 balances over the course of a career. As the figure shows below, preserving just one $5,000 balance at age 25 can result in $70,000 in retirement savings, whereas three $5,000 balances preserved over the course of a career could result in an additional $123,600 in retirement savings.

Figure 1 – Value of Preserving $5,000Source: Retirement Clearinghouse

Taken together, the new data presented at the WISER roundtable demonstrate that by reducing cashouts, consolidating balances and achieving higher balance levels, women could benefit disproportionately from the widespread adoption of auto portability.

Tom Hawkins is vice president of sales and marketing with Retirement Clearinghouse, and oversees all key operational aspects of this area, including RCH’s web presence, digital marketing and plan sponsor proposals. In other roles for RCH, Hawkins has performed product development, helped lead the company’s re-branding, evaluated and organized industry data and makes significant contributions to RCH thought leadership positions.

Every May, WISER is pleased to partner with organizations across the country for Older American’s Month, led by the Administration on Aging, part of the Administration for Community Living. The 2018 theme, Engage at Every Age, emphasizes that you are never too old (or young) to take part in activities that can enrich your physical, mental, and emotional well-being. It also celebrates the many ways in which older adults make a difference in our communities.

Here at WISER, we believe wholeheartedly in the message of Older Americans’ Month—that no matter your age, you have unique benefits to offer to society, your loved ones and yourself. Even if you are no longer working, there are ways to stay engaged with the world around you. Doing so keeps you connected to others and keeps you alert—which is a good thing for your finances. The more isolated you are, the more susceptible you can become to financial scammers, who are likely to prey on older Americans.

For those who aren’t quite ready for more advanced money topics, WISER created a storybook called Sonja Meets Her Future Self. The book is available for free download or can be ordered directly from WISER. In the story, a young girl named Sonja travels forward in time and meets future versions of herself. Along the way she learns about the importance of saving and what it means to be retired. This booklet provides a multi-generational look at retirement planning and the valuable lesson of save, spend and give.

In addition to teaching others about financial lessons, another great way to stay engaged is through volunteer work. Doing so can keep you busy during retirement and is often an activity that is free of cost. Websites like volunteermatch are a great starting point. Your local library is another great resource to find community groups that will keep you engaged.

WISER

About Us

WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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